(2016-09-29) Ezz Steel Q22016 loss leaps 19% Ezz Steel (ESRS), the largest independent producer of steel in the MENA region and market leader in Egypt, today announced its consolidated results for the period ending 30 June 2016.
Company's net losses increased by 19.3% in the second quarter due to FX differences.
the company incurred LE 239.567 million net loss in the secnd quarter, compared with net loss of LE 200.755 million a year ago.
The company reported consolidated net sales for H1 2016 of EGP 9 billion, representing a decrease of three per cent year on year was mainly due to the timing of the holy month of Ramadan, which largely fell within the second quarter of 2016. Flat product prices were down by nine per cent versus the same period of last year while long product prices were up by three per cent during the same period.
Gross profit of EGP 819 million was recorded for H1 2016, an increase of 90 per cent from the EGP 432 million recorded in H1 2015.
Net result after tax and minority interests recorded a loss of EGP 376 million for H1 2016, 12 per cent higher than during the same period in 2015. This was mainly due to EGP 553 million of foreign exchange losses from the devaluation of the Egyptian pound during the period.
The successful launch of our new DRI facility at Suez has extended the advantages of our flexible business model to all ezzsteel business units. This flexibility will prove instrumental in mitigating the adverse conditions in which ezzsteel is expected to operate in the coming quarters.
Commenting on the results, Mr Paul Chekaiban, Chairman and Managing Director of ezzsteel, said:
Continuing the trend we have seen in the first quarter of 2016, international steel markets remained weak during the second quarter and this, combined with the erratic volatility of the Egyptian financial environment, has led to us recording a loss during the period.
“However, our average overall operating margin has remained solid and we are seeing greater balance in the operating margin across the business units. This is due to the enhanced flexibility that we have built into our business model in recent years representing a first step towards gradual recovery.”
